Montrose Environmental(US:MEG)2025-11-05 21:01Financial Performance - Revenues for the three months ended September 30, 2025, increased by $46.2 million or 25.9% compared to the same period in 2024, driven by strong organic growth and acquisitions [158]. - Revenues for the nine months ended September 30, 2025, increased by $129.9 million or 25.6% compared to the same period in 2024, with significant contributions from all segments and emergency response revenue [159]. - Total revenues for the nine months ended September 30, 2025, were $637.3 million, representing a 25.7% increase from $507.3 million in the same period of 2024 [175]. - Total reportable segment revenues for the three months ended September 30, 2025, increased by 25.9% to $224.9 million compared to $178.7 million for the same period in 2024 [176]. - For the nine months ended September 30, 2025, total reportable segment revenues increased by 25.6% to $637.3 million from $507.3 million in 2024 [176]. Segment Performance - Total revenue from emergency response related services was $11.5 million for the three months ended September 30, 2025, compared to $12.0 million in 2024, while for the nine months, it increased to $73.9 million from $40.6 million [154]. - Assessment, Permitting and Response segment revenues increased by 75.1% to $91,081,000 for the three months ended September 30, 2025 compared to $52,019,000 in 2024 [176]. - Measurement and Analysis segment revenues increased by 7.5% to $62,958,000 for the three months ended September 30, 2025 compared to $58,583,000 in 2024 [176]. - Remediation and Reuse segment revenues increased by 4.1% to $70,849,000 for the three months ended September 30, 2025 compared to $68,085,000 in 2024 [176]. - The Assessment, Permitting, and Response segment saw organic growth of $39.6 million and $45.0 million for the three and nine months ended September 30, 2025, respectively [176]. - Measurement and Analysis segment revenues increased by $2.6 million and $16.0 million for the three and nine months ended September 30, 2025, respectively, driven by strong organic growth [177]. - Remediation and Reuse segment revenues increased by $2.8 million and $12.4 million for the three and nine months ended September 30, 2025, respectively, with additional revenue from acquisitions of $7.6 million [179]. Expenses and Costs - Cost of revenues for the three months ended September 30, 2025, increased by $30.7 million or 29.1%, with a cost of revenue as a percentage of revenue at 60.6% [161]. - Selling, general and administrative expenses for the three months ended September 30, 2025, increased by $4.8 million or 7.9%, with a decrease in expenses as a percentage of revenues to 29.2% [165]. - Amortization expense for the three months ended September 30, 2025, was $7.3 million, down from $9.0 million in 2024, while for the nine months, it decreased to $23.0 million from $24.6 million [144]. - Corporate and other costs increased by $1,570,000 for the three months ended September 30, 2025 compared to the same period in 2024, primarily due to higher bonus accruals [183]. Income and Earnings - Net income for the three months ended September 30, 2025, was $8.4 million, compared to a net loss of $10.6 million in the same period in 2024 [157]. - Net income per share attributable to common stockholders for the three months ended September 30, 2025, was $0.24, compared to a loss of $0.39 in the same period in 2024 [157]. - Segment Adjusted EBITDA for total reportable segments was $47,131,000 for the three months ended September 30, 2025, a 30.1% increase from $36,213,000 in 2024 [180]. Cash Flow and Financing - For the nine months ended September 30, 2025, net cash provided by operating activities was $55.5 million, a significant increase of $65.3 million compared to a net cash used of $9.7 million for the same period in 2024 [190]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $12.6 million, significantly lower than $137.2 million for the same period in 2024, which included multiple acquisitions [193][194]. - Net cash used in financing activities for the nine months ended September 30, 2025, was $49.2 million, driven by repayments of borrowings totaling $495.6 million [195]. - As of September 30, 2025, the company had $191.7 million available under the 2025 Credit Facility and $6.7 million in cash on hand [185]. Interest and Tax Expenses - Interest expense for the three months ended September 30, 2025, was $5.0 million, compared to $4.1 million in the same period of 2024, indicating an increase in financing costs [151]. - Interest expense, net for the nine months ended September 30, 2025, increased by 30.2% to $14.9 million compared to $11.4 million for the same period in 2024, primarily due to higher interest rates and debt balances [172]. - Income tax expense for the three months ended September 30, 2025 was $7,281,000, a 432.2% increase from $1,368,000 in the same period of 2024 [175]. - Income tax expense for the nine months ended September 30, 2025, increased by 148.7% to $11.1 million compared to $4.5 million for the same period in 2024 [174]. Acquisitions and Future Outlook - During the three months ended September 30, 2025, no acquisitions were completed, while two acquisitions were completed in the same period of 2024, generating revenues of $4.3 million, representing 2.4% of total revenues [144]. - The company expects revenue growth to continue to be driven significantly by acquisitions, despite a temporary pause in acquisition activities [144]. - The company anticipates that amortization of identifiable intangible assets and other acquisition-related costs will continue to be significant as it pursues further acquisitions [144]. - The company anticipates making up to $23.4 million in aggregate earn-out payments between 2025 and 2027 related to acquisitions [185]. - The company announced a stock repurchase program of up to $40.0 million on May 7, 2025, although no repurchases were made in the nine months ended September 30, 2025 [199].